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Are there monetary clusters in the Eurozone? The impact of ECB policy

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  • Dominguez-Torres, Helena
  • Hierro, Luis Ángel

Abstract

This paper analyses what effects the monetary policy of the European Central Bank have on the economic activity of Eurozone countries. We identify groups of countries which exhibit different economic responses to monetary policy and the factors driving such spatial differences. We distinguish three periods, spanning from 2001 to 2017 and examine conventional as well as unconventional monetary policies in different economic backgrounds of expansion and crisis. We find problems of spatially asymmetric transmission of monetary policy in the period 2008M10–2014M12 and note that different spatial responses might operate in favour of monetary policy or be indifferent to this policy.

Suggested Citation

  • Dominguez-Torres, Helena & Hierro, Luis Ángel, 2020. "Are there monetary clusters in the Eurozone? The impact of ECB policy," Journal of Policy Modeling, Elsevier, vol. 42(1), pages 56-76.
    • Handle: RePEc:eee:jpolmo:v:42:y:2020:i:1:p:56-76
    DOI: 10.1016/j.jpolmod.2019.11.001
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    Cited by:

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    3. Yildirim, Zekeriya, 2022. "Global financial risk, the risk-taking channel, and monetary policy in emerging markets," Economic Modelling, Elsevier, vol. 116(C).
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    5. Vera Mirović & Branimir Kalaš & Nada Milenković & Jelena Andrašić & Miloš Đaković, 2024. "Modelling Profitability Determinants in the Banking Sector: The Case of the Eurozone," Mathematics, MDPI, vol. 12(6), pages 1-17, March.
    6. Benecká, Soňa & Fadejeva, Ludmila & Feldkircher, Martin, 2020. "The impact of euro Area monetary policy on Central and Eastern Europe," Journal of Policy Modeling, Elsevier, vol. 42(6), pages 1310-1333.

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    More about this item

    Keywords

    European Central Bank; Monetary policy; Spatial effects; Cluster analysis;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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